KESH, no money for power supply

The prolonged drought that continues for more than 1 year has ruined the poor finances of KESH. The import suppliers now are threatening the corporation that they will stop offering it.

The KESH financial balance received a shock last year, when they were obliged to import big amounts of energy, in order to guarantee the necessary supply for the country. By the end of the year, the government found a temporary solution by enabling KESH to loan from the private banks for paying the imported energy bills.

But the year did not end together with the financial problems of KESH. The drought continued and the country’s hydro reserves reached the lowest historical points, and the company has been obliged to buy energy from abroad. During January, KESH imported 14 million EUR of energy and the import might continue for the entire year, which is expected to be dry. But the fewer rains are not the only cause that have plunged KESH into crisis.

KESH is facing difficulties because CEZ has not paid 60 million EUR of debts for the power bought from KESH. CEZ says that they will pay the debt if the government will pay to them the debts created by the state institutions, who have not paid for electricity. Both companies have sued each other, and there is no final solution yet. In these conditions, the only possibility for the country to not have a crisis is the government’s financial intervention.

The government can review the 2012 budget

Having its own financial difficulties, the government doesn’t have a lot of solutions for helping KESH finances. Top Channel has learned that the Ministry of Finances is negotiating with CEZ for finding an agreement for the debts.

One of the solutions that is being negotiated, is that the debts of public institutions will not be paid at CEZ, but at KESH. Although there is no official figure, it is estimated that the state owes to CEZ around 100 million EUR. The government is proposing to pay some of these debts to KESH, from the unused funds at the Ministry, but this would be a temporary solution. According to the calculations, KESH needs an additional 100 million EUR for the entire year, in order to guarantee the country’s supply. This means that the 60 million EUR that KESH owes to CEZ are still not enough, and this would oblige the government to find another solution, that of reviewing the budget a few months after it was approved, by shrinking the investment funds and the other voices. And this time they will be obliged to pay KESH, because the banks do not accept anymore guarantees, since the government’s debt is considered at high risk.

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